Difference between equity and enterprise cash flow

Reference no: EM132979397

Learning objective 1: To provide students with an understanding of business valuation using discounted cash flow valuation techniques and the importance of understanding assumptions underlying business valuations

Learning objective 2: To provide students with an understanding of discount rates and risk as applied to business valuation; how to analyze risk;
alternative definitions of cash flow and how and when they are applied;
the advantages and disadvantages of the most commonly used discounted cash flow methodologies;
the sensitivity of terminal values to changes in assumptions; and
adjusting firm value for non-operating assets and liabilities.

Discussion Question 1: How does firm size of affect risk and required return?

Discussion Question 2: How would you estimate the beta for a publicly traded firm? For a private firm?

Discussion Question 3: Explain the difference between equity and enterprise cash flow.

Discussion Question 4: What is the appropriate discount rate to use with equity cash flow? Why? With enterprise cash flow? Why?

Reference no: EM132979397

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